It’s been called the “Facebook effect.” Investors had a love affair with shares of social media companies, some of which produced spectacular short-term gains. Today, though, after Facebook’s rocky IPO, many are steering clear of investing in these types of firms.
Yet there is one type of social media company investors are watching closely: Firms that create solutions to facilitate interactions between a company and its employees and customers.
There’s no doubt about it: Companies are diving deeper into more robust and complex social media strategies using sites such as Facebook, Twitter and Pinterest, to name just a few. Another plus for this new breed of social media company is a focus on business customers instead of consumers. The business customer will always have more capacity to spend on new technologies than consumers.
One report indicated that startups targeting the business-enterprise niche received on average a tidy sum of $14 million to move forward with the development of internal social media platforms for corporations. A recent analysis of 55 social business startups revealed that over two-thirds of those seeking this type of venture capital got the green light. That means a number of IPOs down the line. Will any of these companies be the next big thing in the investment world? Stay tuned!